The Congress Company Has Identified Two Methods for Producing Playing

question 21

Multiple Choice

The Congress Company has identified two methods for producing playing cards. One method involves using a machine having a fixed cost of $10,000 and variable costs of $1.00 per deck of cards. The other method would use a less expensive machine (fixed cost = $5,000) , but it would require greater variable costs ($1.50 per deck of cards) . If the selling price per deck of cards will be the same under each method, at what level of output will the two methods produce the same net operating income (EBIT) ?

• A) 5,000 decks
• B) 10,000 decks
• C) 15,000 decks
• D) 20,000 decks
• E) 25,000 decks

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Definitions:

Attitudinal Discrimination

A form of discrimination based on preconceived opinions, attitudes, or biases towards individuals or groups, regardless of factual evidence or experience.

Beliefs

A consumer’s subjective perception of how a product or brand performs on different attributes based on personal experience, advertising, and discussions with other people.

Subjective Perception

An individual's personal and unique interpretation of stimuli, based on their own experiences, feelings, and biases.

Freshness Dates

Labels on food and beverage packaging that indicate the last date the product should be consumed or used for the best quality.